SC extends time for US-based Danny Gaekwad to deposit ₹600 cr with Sebi

The Supreme Courtroom at the moment permitted US-based Digvijay ‘Danny’ Gaekwad to deposit ₹600 crore by Thursday 2 pm in an account designated by the Reserve Financial institution of India (RBI). The apex court docket had directed Gaekwad to deposit this cash by the top of day on Wednesday to show the bona fides of his ₹5,000 crore competing provide in opposition to the open provide made by the Burman Household to accumulate increased stakes in Religare Enterprises.

On 12 February, the Supreme Courtroom allowed Gaekwad a quick extension of time, directing that the deposit be made by 2 pm IST on 13 February 2025, with the RBI offering the mandatory particulars of the checking account and SWIFT quantity to facilitate the switch. In its ruling, the court docket burdened that the opposite phrases and circumstances from its earlier order dated 7 February 2025, stay unchanged, and the extension granted pertains solely to the deposit course of.

Proof of bona fides

The dispute stems from a Particular Depart Petition filed by Gaekwad difficult an interim order by the Delhi Excessive Courtroom, which allowed the Burman Household’s open provide to proceed regardless of objections from the applicant. On 7 February, the Supreme Courtroom directed Gaekwad to deposit ₹600 crore in accordance with the Securities and Trade Board of India (Sebi) rules to exhibit the bona fides of his competing provide. The deadline for this layer was set for 12 February.

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The court docket clarified that if the deposit shouldn’t be made by this date, the instructions of their order of seven February will robotically be vacated with out additional reference to the court docket.

Emails to Gaekwad and Burman Household haven’t acquired any response. 

The petition filed on 12 February acknowledged that earlier than approaching the Supreme Courtroom, Gaekwad had utilized to the RBI looking for approval to determine an escrow account with a scheduled business financial institution to make a competing provide. Within the e mail, Gaekwad provided to deposit ₹60 crore and acquire a financial institution assure (BG) for ₹540 crore. This approval is vital to proceed because the funds can be remitted from overseas. Given the substantial quantity concerned, RBI approval is required for such remittance. 

Gaekwad acknowledged that he has not acquired any response from RBI thus far. He adopted up with RBI on 11 February, requesting approval for the escrow account with proof of funds exceeding $90 million in money and letters from Gaekwad’s US bankers certifying the stability accessible. 

Within the ongoing litigation, the SC crystallised the central situation because the date of the general public provide. Gaekwad argued the announcement made on 18 January, must be thought-about the official begin of the open provide interval. Alternatively, Religare and Burman entities contend that the date must be set to 25 September 2023, when the Burman household’s provide was initially made.

Sebi has but to determine on this side, with the applicant additionally requesting an exemption from sure Sebi rules as a precautionary measure. Solicitor common Tushar Mehta, showing for Sebi, knowledgeable the apex court docket {that a} listening to was mounted on Wednesday on the exemption utility filed by Gaekwad relating to his competing provide to accumulate stakes in Religare Enterprises. Nonetheless, after Gaekwad sought an adjournment, it was posted for 14 February. Gaekwad claimed the listening to couldn’t happen as he had sought a digital listening to, not an adjournment.

On 4 October 2023, the Burmans made the primary public assertion on their open provide. After a lot delay, the Burman household, which owns somewhat over 25% of Religare, obtained approvals from all regulatory companies and introduced on 18 January to purchase as much as 26% shares from minority buyers by way of an open provide that opened on 27 January. It was to finish on Friday, however following the listening to on Gaekwad’s enchantment, the Supreme Courtroom mentioned the Burmans’ open provide couldn’t be closed till Sebi decides on the legality of Gaekwad’s competing provide.

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